Woodside Petroleum cancels $40bn Australia onshore LNG project
12 April 2013
Australia's second biggest oil company, Woodside Petroleum, has shelved a $40bn (£26bn) proposed liquefied natural gas (LNG) project in Western Australia, which would have processed gas from the Browse Basin into LNG for export to Asian utilities. The company said it would look into alternatives including a floating liquefied natural gas facility instead.
A floating LNG facility would produce about half of the planned output of the onshore Browse plant
Building a floating plant in Asia and towing it into place off the coast of Western Australia would be likely to save billions of dollars in construction costs.
Earlier this month, Exxon Mobil and BHP Billiton disclosed plans to build the world’s largest floating LNG vessel off northwestern Australia, producing six million to seven million tons of liquified gas per year, starting in 2020 or 2021.
Browse had been aiming for 12 million tons per year.
The cancellation of the Browse onshore plant could spell an end to new onshore gas projects in Australia in favour of offshore plants that can be built at a lower cost and face fewer environmental and indigenous landowner hurdles.
The Woodside project was one of dozens of gas export terminals planned in Australia, but wages in Australia and the strong Australian dollar have made LNG projects extremely costly. The Woodside project was one of the most expensive in the world.
The country also faces competition from other LNG resources discovered in Canada, the US and east Africa.
However, Australia is projected to becomes the world's largest supplier of natural gas, overtaking Qatar, by the end of the decade.
Global energy companies have invested $140 billion in six L.N.G. plants in just two and one-half years as Australia has increased production on its way to becoming the largest exporter of the gas in the world.
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